Asset Retirement Obligation

6 Months Ended

Jun. 30, 2015

Asset Retirement Obligation [Abstract]

AROs associated with the retirement of a tangible long-lived asset are recognized as a liability in the period in which it is incurred and becomes determinable. Under this method, when liabilities for dismantlement and abandonment costs, excluding salvage values, are initially recorded, the carrying amount of the related oil and natural gas properties is increased. The fair value of the ARO asset and liability is measured using expected future cash outflows discounted at Legacy’s credit-adjusted risk-free interest rate. Accretion of the liability is recognized each period using the interest method of allocation, and the capitalized cost is depleted over the useful life of the related asset.

The following table reflects the changes in the ARO during the six months ended June 30, 2015 and year ended December 31, 2014:



	June 30, 2015			December 31, 2014
	(In thousands)
Asset retirement obligation - beginning of period	$	226,525		$	175,786
Liabilities incurred with properties acquired	18,756			50,487
Liabilities incurred with properties drilled	—			941
Liabilities settled during the period	(1,271		)	(2,918		)
Liabilities associated with properties sold	(4,572		)	(5,891		)
Current period accretion	5,201			8,120
Asset retirement obligation - end of period	$	244,639		$	226,525